IMPORTANT POINT
A third party cannot challenge a mortgage created prior to their purchase of property, and the auction proceedings are valid if conducted according to law.

ORDER :

1. This writ petition is filed for the following relief:

“......to issue a writ, order or direction more particularly one in the nature of Writ of Certiorari to call for records relating to Regular Appeal No. 66 of 2023 on the file of Honorable Debts Recovery Appellate Tribunal at Kolkata, arising out of R.A. No. 6 of 2016 in C.P. No. 12/2014 in R.P. No. 320/2003 in O.A. No. 1687/1999 and consequently set aside the same and struck down the auction of land property admeasuring Ac. 1-03 guntas in Sy. No. 294/A and 295/A at old Kothagudem Village, held on 15.05.2014 in the interest of justice and to pass...”

2. Heard Sri P. Rama Sharana Sharma, learned counsel for the petitioner and Sri G. Prabhakar Sarma, learned counsel appearing on behalf of respondent No. 1 and Sri Mummaneni Srinivasa Rao, learned counsel appearing on behalf of respondent No. 10.

3. Brief facts of case:

3.1 Respondent Nos. 2 and 5 are Partnership Firms represented by their Managing Partner i.e. respondent No. 3. They availed credit loan facilities on 08.02.1995 from State Bank of Hyderabad, presently merged with State Bank of India i.e. respondent No. 1. One Sri I.Narayana Rao, who is father of respondent No. 3 (Managing Partner of respondent Nos. 2 and 5 Firms) created equitable mortgage by depositing original registered sale deed bearing document No. 670 of 1986, dated 22.08.1986 in respect of immovable property i.e. land admeasuring Ac. 1-03 guntas in Sy. Nos. 294 and 295 situated at Kothagudem Village, Khammam District as a security for repayment of the loan availed by respondent Nos. 2 and 5 on 09.02.1995. When respondent Nos. 2 and 5 failed to repay the loan, respondent No. 1 filed O.A. No. 1687 of 1999 (old O.A. No. 763 of 1998) before the Debts Recovery Tribunal-I at Hyderabad against respondent Nos. 2 to 8 for recovery of dues. The said O.A. was allowed on 27.06.2003 and Recovery Certificate R.P. No. 320 of 2003 was issued for recovery of Rs.57,02,901.76 ps. together with interest and costs by sale of the mortgaged immovable property.

3.2 In recovery proceedings vide R.P. No. 320 of 2003, the subject property was brought for sale and conducted e-auction on 15.05.2014 and respondent No. 10 was declared as a successful bidder for an amount of Rs.4,40,000/- and he has paid the said amount and sale certificate was also registered in his favour and Advocate Commissioner handed over the possession on 30.05.2018. In the meanwhile, the petitioner filed claim petition i.e. C.P. No. 12 of 2014 before the Debts Recovery Tribunal-I, Hyderabad claiming to be the owner of subject property contending that he had purchased the same on 08.02.2006 by way of registered sale deed bearing document No. 148 of 2006 from Dr. Inturi Sri Babu and his vendor in turn purchased the same through registered sale deed bearing document No. 1150 of 2005 dated 25.08.2005 from Sri E.V.S.V. Prasad, who had mortgaged the same as a security in favour of Dr. Inturi Sri Babu vide Mortgage Deed document No. 374 of 2003 dated 14.07.2003. The Debts Recovery Tribunal, Hyderabad after considering the contentions of the respective parties has dismissed the Claim Petition No. 12 of 2014 by its order dated 27.10.2016.

3.3 Aggrieved by the said order, the petitioner filed R.A. No. 6 of 2016 on the file of Debts Recovery Tribunal-I, Hyderabad under Section 30(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter called for brevity as ‘the Act’). The said Debts Recovery Tribunal-I, Hyderabad dismissed the said Appeal by its order dated 08.01.2019 confirming the order of the Recovery Officer dated 27.10.2016.

3.4 Aggrieved by the said order, the petitioner had approached the Debts Recovery Appellate Tribunal at Kolkata vide Appeal No. 66 of 2023. The Appellate Tribunal also dismissed the Appeal on 15.05.2024 confirming the orders of the Debts Recovery Tribunal-I, Hyderabad as well as Recovery Officer. Aggrieved by the same, the petitioner filed the present Writ Peti